Cyber Crime: A Threat to Financial Institutions

The unprecedented growth of cyber crime on financial institutions is alarming. According to the An FBI report it has been revealed that over 400 reported cases of account takeovers by cyber criminals is with an actual loss of approximately $85 million.

A disappointing outcome of such cyber crime is the unimaginable burden on the banks, which puts customers money at high risk. Financial institutions clearly need to identify such threats and potential solutions to prevent the heavy burden of such unsafe events.

Challenges of Cyber Crime

Cyber Criminals are expert in designing special technology extremely difficult for identification by financial institutions and can easily sway naive customers. Such criminals are highly cautious not to spread their malicious intentions too far to be easily caught and instead use new tricks at regular intervals to trap users.

Financial criminals create attractive messages to run across banking websites. Upon clicking SecOps such ads, cyber criminals can easily access login details and passwords. These details are majorly misused for conducting fraudulent transactions and transferring lump sum amount of money to various other accounts.

ATM services are also prone to fraudulent activities by cyber criminals using various tricks to intercept confidential data in the card including the user’s pin number. This way criminals can create fake cards to withdraw money from the individual’s account.

Many financial institutions are concerned with the increasing frequency and new sophisticated methods used by cyber criminals. Financial threats are increasing costs to design resources and technology to combat cyber crime taking place on a large-scale. Electronic banking is one of the frequently used technologies by customers. Banks and ATM vendors are under constant pressure to handle attacks on mediums such as internet and ATM machines which today are primary sources to access cash.

Financial criminals find it very convenient to attack a single line of business like wire transactions. Frauds on such mediums facilitate the attacker for illegal activities such as money laundering which happens quickly and goes unnoticed. Many FI’s are failing to employ necessary resources to deal with money laundering and maintain Bank Secrecy Act due to continual criminal challenges.

Small and mid-sized financial institutions need to be cautious in keeping their business open to certain industry type. A special risk management strategy needs to be adopted for long-term loans such mortgage, auto financing, energy lending all of which involve high levels of risk.

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